Dairy farmers are reaping the benefits of current high prices for dairy-beef crossbred calves thanks to historically lower cattle placements and strong beef demand. It is not unusual for day-old calves to bring $600 to $700 or more, significantly more than full dairy calves.
This outcome is a welcome revenue generator in an era of tight margins due to stagnant milk prices and challenging input costs.
As a result, beef semen use in dairy herds has increased greatly. In 2021, beef semen sales totaled a record high of 8.7 million units, up 6.2 million units since 2016.
Dairies have also upped their skills to produce higher-quality crossbred calves. Matings are now based more on desirable beef market traits, such as growth and carcass characteristics, than simply providing a crossbred calf with a black hide.
Still, crossbred calves offer some challenges for the beef value chain, including inconsistent size between animals and generally longer days on feed than native beef cattle.
Where do beef embryos fit?
Full beef calves from beef embryos incorporated into a strategic dairy breeding program using in vitro fertilization (IVF) offer the benefits of consistent growth, increased average daily gain (ADG) performance and the potential for higher dairy profits.
In some markets, these calves sell for $850 or more at 1 day old – even higher than crossbred calves.
Recent research at Texas Tech University helps explain at least some of this difference. It shows:
- When adjusted for size at maturity, straight-bred beef cattle had better feed efficiency than dairy-beef crossbred cattle.
- Straight-bred beef calves raised on calf ranches or traditional cow-calf systems performed similarly.
- Dairy genetics increased carcass leanness of crossbred calves.
The researchers also noted that when embryo transfer was used to make pregnancies in Holstein and Jersey cows, the progeny of straight-bred beef genetics was more moderate in frame size and wider than half-siblings with either Holstein or Jersey maternal genetics.
This outcome means these animals are more desirable by feeders and packers because they usually fit better in facilities and help create more uniform pen groups.
Market outlook
Opportunities for beef-on-dairy strategies remain strong for the foreseeable future, especially beef embryo-based programs.
Feeders and packers seek uniformity between animals and efficient growth. They are willing to reward dairies for these efforts, at least while the national beef herd rebuilds following years of drought and economic hardships.
According to the USDA’s Economic Research Service April 2024 Beef Market Outlook, fed cattle prices are up about $2 from March to $185, about 5% above prices in 2023.
However, remember, market shifts are inevitable. Today’s profits are no guarantee of tomorrow’s performance.
If you have adopted beef-on-dairy, do you have a plan to cope with price reductions or the potential loss of a market for your calves?
Now is the time to develop and strengthen key marketing relationships to ensure market access and create opportunities to offset price downturns.
Also, consider the quality of the calves you deliver to customers. Select the breeding strategy that will bring you and your value chain partners the most long-term value.
To learn more, check out these beef-on-dairy podcasts.
References omitted but are available upon request by sending an email to the editor.
.jpg?t=1687979285&width=640){kind=logo}
